Yelp (YELP): Staying On The Sidelines - Piper Jaffray
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Piper Jaffray analyst, Samuel Kemp, reiterated his Neutral rating on shares of Yelp (NYSE: YELP) after the company reported a strong Q2 with revenue of $173M and EBITDA of $28M, ahead of expectations for $170M and $24M.
Strength was driven by solid account adds and ARPU growth consistent with Q1. Guidance was raised to account for the beat and flow through for the remaining year, but 2H'16 guidance is conservative. The analyst believes at 14.5x 2018E EV/EBITDA, YELP's (after hours) valuation fully accounts for the strength in the business and the analyst continues to have fundamental product/competition concerns about the business. Additionally, the analyst estimates user growth decelerated from 5% to 2% during the quarter, despite an increased advertising budget.
No change to the price target of $35.
Shares of Yelp closed at $32.64 yesterday.
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